According to the findings of a Financial Times poll of 48 economists, the eurozone’s 20-nation currency bloc will enjoy relatively moderate economic growth of +0.6% in 2024.
The European Central Bank (ECB) and the International Monetary Fund (IMF) are more positive, with analysts expecting the bloc’s GDP to increase 0.8% and 1.2% in 2024, respectively.
Despite the fact that salaries are likely to expand faster than inflation, experts polled by the FT believe the Eurozone economy will not be able to reach 0.6% growth. Two-thirds of those polled believe the eurozone’s economy is heading into a slump. a period of two consecutive quarters of GDP contraction. According to the economists, wage growth in the single currency area is set to total only 4% in 2024, while consumer prices are projected to rise by over 2.5% on average next year and slightly below 2.1% in 2025.
The ECB had previously forecast wages and inflation next year to grow 4.6% and 2.7% respectively, which would mark the growth of real household incomes for the first time in three years. The regulator expects consumer prices to grow 2.1% in 2025. Meanwhile, unemployment is projected to rise from a record eurozone low of 6.5% in October to 6.9% at the end of next year, according to most economists polled.
High interest rates, likely energy market turmoil, and geopolitical instability are expected to lead to a deeper recession, economists warned, adding that the potential election of Donald Trump as US president, as well as Ukraine losing its military conflict with Russia, could send the eurozone into a period of even weaker growth.
